6 August 2024
Bitcoin (BTC) saw a 20% price drop over the weekend, briefly losing the $50,000 support level. The rest of the market followed the flagship cryptocurrency, crashing around 23% in the last three days. Since then, the crypto market has momentarily reclaimed some key levels, but analysts fear the bleeding isn’t over yet.
Is The Bitcoin Bottom In?
Following Bitcoin’s drop below $50,000, crypto analyst Altcoin Sherpa shared his thoughts on BTC’s performance. To him, the flagship cryptocurrency hit one of its possible bottoms on Monday morning after reaching the $49,000 support zone.
Related Reading: Bitcoin RSI Goes Bearish For The First Time Since August 2023, Will It Crash Below $40,000?
The massive drop to the $49,000-$50,000 area, which represented a 17% fall in less than 24 hours, could be the bottom, said Sherpa. However, he believes lower support levels will likely be tested in the coming days.
Per the post, the analyst won’t be “sitting comfortably” until BTC prices test the $40,000-$47,000 area, as these levels “got a lot more support.” Bitcoin’s current price action reminds the analyst of its performance during the 2021 rally.
At the time, BTC saw the January consolidation area “be the key focal point for the temporary bottom” during that summer. The summer 2021 violent dump, which resembles the current crash, was followed by a bottom that “formed over several months.”
Based on this, Sherpa believes that the January 2024 price range could be the key area to watch. He also reaffirmed his previous forecast for the cycle, which asserted that the market would resume its run during Q4 2024 and continue throughout Q1 2025:
What’s going to happen after this dump is anyone’s guess; my personal one is that we chop around for the next several months after this dump is over and then have a great Q4-Q1 of 2025. Survive until then.
BTC Sees The Cycle’s Deepest Retrace Yet
According to Rekt Capital, the recent Bitcoin crash officially became the deepest retrace of the cycle. BTC saw 23% and 25% drops in May and July, respectively, which have now been surpassed by the 29% drop registered in the last two weeks.
Trader and market analyst Crypto Bullet also weighed in on the current BTC performance. To the analyst, Bitcoin’s chart is reminiscent of the COVID-19 crash in 2020, displaying a similar Descending Broadening Wedge pattern.
Per the post, the largest cryptocurrency by market capitalization saw a similar dump in March 2020, followed by a price recovery and breakout from the pattern in the coming months. Similarly, BTC tested the lower support levels within the pattern on Monday morning, which could suggest the price is poised to recover soon.
Nonetheless, Crypto Jelle believes that Bitcoin’s price is testing key levels on this weekly opening. To him, BTC is “still holding inside the descending broadening wedge and holding sensible area of support.” Due to this performance, Jelle considers that “the higher the day end, the better.”
Lastly, renowned analyst Ali Martinez stated that Bitcoin must reclaim the $54,000 support level to prevent dropping to the $40,000 mark. Based on BTC’s MVRV Pricing Bands, the analyst believes the flagship cryptocurrency could soon retest the $67,000 resistance level if it holds the current price.
As of this writing, BTC has recovered 8.8% from its fall, trading at $54,320.